Jan 29 Energizer Holdings Inc, best known for its batteries, cut its full-year profit forecast after reporting lower-than-expected first-quarter results due to a 6 percent drop in organic sales in its personal care business.
The company's shares were down 6 percent at $96.45 on the New York Stock Exchange on Wednesday. They fell as much as 10 percent earlier.
"The organic sales decline in personal care was unexpected," BMO Capital Markets analyst Connie Maneaty said.
Energizer gets about two thirds of revenue from its personal care products, such as Schick razors, Banana Boat sunscreen and Playtex tampon.
Chief Executive Ward Klein said heightened promotional activity by rivals over the past year has hurt the consumer demand and overall category volumes.
Energizer, which bought Johnson & Johnson's feminine care brands in the United States, Canada and the Caribbean last July, had said two U.S. retailers would stop selling its batteries.
Many of the negative trends in the personal care division will continue at least in the second quarter, Klein said.
The company cut its full-year earnings forecast to $7-$7.25 per share from $7.25-$7.50. Analysts on average were expecting $7.39, according to Thomson Reuters I/B/E/S.
Energizer said earnings fell to $107.9 million, or $1.71 per share, in the quarter ended Dec. 31, from $129.8 million, or $2.07 per share, a year earlier.
On an adjusted basis, the company earned $2.10 per share, missing analysts' average forecast of $2.14.
Sales slipped 6.5 percent to $1.11 billion.
Energizer, which was spun off from Ralston Purina Co in 2000, has since then grown with the acquisitions of Schick Wilkinson Sword, Playtex, the Edge and Skintimate shaving prep business and American Safety Razor. (Reporting by Aditi Shrivastava and Chris Peters in Bangalore; Editing by Don Sebastian)